Facts of the Case

M/S Sahni Industries, through its proprietor Sh. Ascharaj Lal Sahni, challenged an order dated 27th August 2024 and the underlying Show Cause Notice dated 30th May 2024 issued by the Sales Tax Officer, Delhi, raising a demand of Rs.14,33,412/- (including tax of Rs.7,41,574/-). At the hearing, the petitioner did not press its separate challenge to Section 16(2)(c) of the CGST/DGST Act or to several other specific departmental orders, confining its challenge to the impugned SCN/order and to Notifications No. 9/2023 and 56/2023 (Central and State Tax) issued under Section 168A, extending limitation for GST adjudication — the same notification-validity question pending before the Supreme Court in the DJST Traders batch (SLP No. 4240/2025).

Issues Involved

  1. Whether the demand order dated 27th August 2024 is sustainable where the petitioner filed no reply to the SCN dated 30th May 2024, and how the pending Section 168A notification-validity litigation bears on that question.
  2. Whether the petitioner ought to be granted a further opportunity to reply and be heard despite having filed no response at the adjudication stage.

Petitioner's Arguments

  • The petitioner did not file any reply to the SCN dated 30th May 2024, but the impugned order was passed without an opportunity of being heard, rendering it a non-speaking order liable to be set aside — the same principle applied by the Court in Sugandha Enterprises to a similarly unanswered SCN.
  • The vires of Notifications No. 9/2023 and 56/2023 (Central and State Tax) were also under challenge as part of the common batch of petitions before the Court.

Respondent's Arguments

  • The Department's position, as recorded in the relied-upon impugned order itself, was that despite the taxpayer neither depositing the proposed demand nor filing objections/reply, it had nonetheless been granted opportunities of personal hearing before the demand was confirmed, in compliance with natural justice.

Court Order / Findings

  • The Court traced its own batch order dated 22nd April 2025 in DJST Traders Pvt. Ltd., noting the divergence among High Courts on Notifications 9 and 56 of 2023 and the pendency of SLP No. 4240/2025 before the Supreme Court.
  • Applying its ruling in Sugandha Enterprises — where an SCN that went unanswered nonetheless led to remand because the taxpayer was not shown to have had a genuine opportunity to be heard — the Court held that since the petitioner did not get a proper opportunity to be heard and had filed no reply, the matter deserved to be remanded to the Adjudicating Authority rather than leaving the ex parte demand undisturbed.
  • The impugned order was set aside; the petitioner was granted time till 15th November 2025 to file its reply, with a personal hearing notice thereafter to be communicated by e-mail and mobile in addition to the portal.
  • The validity of the impugned notifications was expressly left open, to be governed by the Supreme Court's decision and the Engineers India Limited batch pending before the Delhi High Court.

Important Clarification

  • Even where a GST assessee files no reply at all to a show cause notice, the Delhi High Court has been willing to remand the resulting demand order where the record does not affirmatively establish that a genuine, effective opportunity of personal hearing was given — treating this as a distinct natural-justice inquiry from mere absence of a written reply.
  • The relief flowing from such remands is consistently made subject to the outcome of the pending Supreme Court litigation on the validity of Notifications No. 9/2023 and 56/2023 issued under Section 168A of the CGST Act.

Sections Involved

  • Section 73, CGST/DGST Act, 2017 — demand provision under which the impugned order raising Rs.14.33 lakh was passed.
  • Section 168A, CGST Act, 2017 — power to extend limitation for adjudication, the basis of the notifications under challenge.
  • Section 16(2)(c), CGST/DGST Act, 2017 — condition restricting ITC to cases where the supplier has paid tax to government, whose separate challenge was not pressed in this petition.
  • Notification No. 56/2023 & No. 9/2023 (Central Tax and State Tax) — limitation-extension notifications, validity left open pending Supreme Court adjudication.

Decision – In Favour of

The decision is disposed of with directions, in favour of the assessee (Sahni Industries) on the facts of opportunity to be heard, while the larger notification-validity question remains pending before the Supreme Court.

Case Details

High Court of Delhi at New Delhi; W.P.(C) 15074/2025 & CM APPL. 62027/2025; Coram: Hon'ble Justice Prathiba M. Singh and Hon'ble Justice Shail Jain; Order dated 26th September 2025.

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